Peninsula Retail Fares Better Than State

August 26, 2009|By Veronica Chufo, vchufo@dailypress.com 247-4741

Taxable sales are down in upper Hampton Roads, but not as sharply as they are in South Hampton Roads.

Overall, total taxable sales for the second quarter shrank 3.5 percent in the region that includes Hampton and Newport News and James City, York and Gloucester counties, compared to the same period in 2008. Taxable sales fell 6.2 percent for the state and 5.6 percent for the Southside, according to statistics from H. Blount Hunter Retail and Real Estate Research Co. of Norfolk.

Every city and county in Hampton Roads but York saw a decline in taxable sales in the second quarter compared to the second quarter of 2008.

In York, total taxable sales were up 8.3 percent. Hunter said that must be due to The Marquis, even though the partially finished shopping center has changed hands because its owners have had financial problems.

"The Marquis has been a big enough difference that it has impacted York County's numbers in a positive way," Hunter said.

Stores there include JC Penney, Kohl's, Target, Dick's Sporting Goods and Best Buy. Electronics sales were up 1,081 percent, thanks to the addition of Best Buy.

"That's because we never had one before," said Jim Noel Jr., York's economic development director.

He also points to the county's two Wal-Marts and two K-Marts, retailers that nationally have held up better in the recession than others, to explain the county's strong sales.

Throughout Hampton Roads, the stores that have taken the biggest hits to sales were furniture and home furnishings, building materials and garden stores and hotels, which all saw double-digit declines.

Clothing and accessory stores in upper Hampton Roads saw growth of 2.4 percent, while those stores on the Southside saw a 13.3 percent decline.

Susan Milhoan, president and CEO of the Retail Alliance, a trade association for Hampton Roads retailers, said the Peninsula was affected more drastically than the Southside when the recession hit.

"They may be just recovering quicker," she said.

What surprises Hunter is that restaurant sales have not fallen.

"It tells me that even though people are tightening their belts, or they say they are, it doesn't mean they go back into their own kitchen to prepare a meal," he said.

Consumer spending is a big part of our nation's economy, and the slowdown in spending is not helping to pull the economy out of the doldrums. But in one sense, it's good, Hunter said.

"If it helps people pay down their credit card bills, if it keeps people from taking out a second mortgage, it is a good thing," Hunter said.

"A lot of people were overextended. A lot of people were shopaholics. Credit card interest is the highest that people will ever pay. People didn't give a second thought to rampant consumerism. I think more people are stopping to think, 'Do I need a 12th pair of shoes?' You can watch them. They pick something up in the store and they put it right back down."

He thinks many consumers' buying behavior will be changed for the long term.

"When you're afraid for your job, or you're trying to get out from under debt, or you've re-prioritized spending, which is what we were all doing, frivolous spending falls by the wayside."